Economist reports proposed merger of Kroger and Albertsons not healthy for labor
MortalConviction: Albertsons-Savon on Northwest Hwy in Dallas, Tex., 2008 (Creative Commons Attribution 3.0 Unported)

A new report issued by economist Marshall Steinbaum from the University of Utah delves into the proposed mega-merger of grocery chains Kroger and Albertsons in ways that have not been fully looked at over the past year. This is important information for any people involved in researching, reporting upon, or assessing the potential impacts that such a mega-merger could have.

  • Marshall Steinbaum’s new research paper, utilizing a large database of posted job offers, demonstrates that the Kroger-Albertsons merger would reduce the individual worker’s bargaining power as well as their union’s power.
  • The paper shows that increased employer concentration has negative effects on both earnings and work hours.
  • And the paper shows that union workers receive significantly higher pay when there are two bargaining counterparties in a given labor market as opposed to when there’s only one.

The presidents from California state United Food and Commercial Workers (UFCW) Locals 5, 7, 324, 400, 770, and 3000, who have been leaders in the efforts to oppose the proposed merger since it was announced over a year ago, provided support for the report:

“Our ability to raise wages and standards in general depends on our ability to pit these companies against one another at the bargaining table—threaten to strike one while directing customers to the other,” the presidents called out. “If these two companies were to become just one company, that power would go away, and that harms workers as well as customers.”

The full report, entitled “Evaluating the Competitive Effect of the Proposed Kroger-Albertsons Merger in Labor Markets,” can be found here.

Workers across the country have experienced the impacts described in the report:

“In our most recent contract negotiations, we were able to leverage one company’s fear of losing market share to their competitor and we used that to get improvements in our contract that they wouldn’t have agreed to otherwise. That helped us get historic raises that would never happen if there were just one company,” says Rachel Fournier, a Ralphs employee in Los Angeles.

“I feel this merger would only bring a negative impact on the workers. Staffing, safety, and our seat at the bargaining table would all come under threat while the corporations reap the benefits from our hardship,” echoed Rena Zagala-Fondren, a Safeway worker from Los Gatos, Calif.

A Seattle area worker had an additional response: “For years we have been facing reduced staffing levels in our stores—during and after COVID,” said Sam Dancy, a front-end manager at Kroger-owned QFC store in West Seattle, Wash. “Our experience is that this would only get worse if the mega-merger were allowed. We need to increase staffing, improve our schedules, and increase our leverage as unionized grocery store workers, not go the other way.”

Jill Young, a just-retired grocery store worker from Grand Junction, Colo., stated, “I started in ’86, was on strike in ’93 and ’96. Over the years I have been injured more than a couple of times and had to take off six months or more to get better. The company tried to cut the leave time to one month. Having a union that was organized, and willing and able to strike was part of what kept that benefit in place. There are young workers just starting out who deserve a future with a union workplace and the leverage I have had. This proposed merger threatens that future.”

Judy Wood, a cake decorator for Albertsons in Orange, Calif., raised several of her concerns: “The power we have when we bargain collectively leads to improvements in stores for both workers and customers. Workers have higher wages and stores are safer now because we have the power to fix hazards that we won through our last contract bargaining session. If this merger goes through, we will lose some of that power, putting the public in a worse position.”

A night crew Ralphs employee in Thousand Oaks, Calif., Benjamin Blum, added his thoughts: “Our unionized workplaces have competitive wages and benefits because workers have fought for and won them. If the proposed mega-merger were approved, workers will lose leverage and be more vulnerable to a single massive employer that would bully and retaliate against workers.”

In theory, the free-market system is supposed to encourage healthy competition, but mergers and conglomerates such as this proposal only reinforce Big Business hegemony over, in this case, the grocery sector of the economy. Typically it’s working people, along with consumers, who end up with the less than nourishing leftovers.

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Special to People’s World
Special to People’s World

People’s World is a voice for progressive change and socialism in the United States. It provides news and analysis of, by, and for the labor and democratic movements to our readers across the country and around the world. People’s World traces its lineage to the Daily Worker newspaper, founded by communists, socialists, union members, and other activists in Chicago in 1924.